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Thursday, September 29, 2011

Wealth vs. Money: Why Main Street is Better Off without Wall Street______________

By Ann TulintseffPublic Banking Institute Board Member

“The real measure of your wealth is what’s left after you’ve lost all your money.”

As we look at the devastation being wreaked across the United States as a result of the selfish recklessness of the titans of the financial services industry, it’s clear that Main Street doesn't need Wall Street. In fact, Main Street is better off without Wall Street.

It’s time to see the seduction of Wall Street’s promises for what they are—an illusion that confuses money with wealth. Money should not be confused with wealth, and the fundamental definitions of each will help understand this difference.

Wealth is a combination labor and/or natural resources.

Money, on the other hand, is simply a medium of exchange for goods and services—a means to facilitate transactions. Money has taken many forms, including shells, beaver pelts, coins, paper notes, and now accounting entries on a computer. In other words, money is an abstract social invention that can be viewed as a contract—a financial obligation. [1]

A community combines its labor and natural resources in order to meet the needs of its members. Money is simply the oil that helps the machine of society function.

Thus the fundamental difference between wealth and money is that money is itself only a claim to wealth, and not that wealth itself. [2]

What are the implications of this? Main Street produces wealth, Wall Street does not. In fact, Wall Street cons us into holding our money, and then siphons it off with interest, fees and market manipulations, resulting in an unnecessary transfer of wealth from people on Main Street to those on Wall Street.

As Glen Edens, a former Sun Microsystems executive, summarizes, "… How can we break the cycle of Wall Street, a strong financial services industry is simply not good for society.Wall Street does not improve productivity, the model is parasitic, transferring huge resources out of the system." [3]

Finally, as a means of facilitating transactions, money should be seen as a public, or community, creation and/or utility. A "free market" becomes a manipulated market when the ability to create money is held by private interests. It’s time that we, the public, reclaimed our sovereign right to issue money “and regulate the value thereof,” as our Constitution declares, by establishing publicly owned banks.

References:[1] Jere Hough at wealthmoney.wordpress.com.[2] "Fixing the System: A history of populism, ancient and modern," by Adrian Kuzminski.[3] http://pewinternet.org/Reports/2010/Impact-of-the-Internet-on-Institutions-in-the-Future.aspx?r=1